Athersys repeats good heart attack study results; reports 2Q loss

As expected, biopharmaceutical company Athersys Inc. (NASDAQ: ATHX) reported late Monday afternoon “several key developments” in testing and commercializing its adult stem cell therapy to treat heart attacks and inflammatory bowel disease, among other disorders.

The development-stage company lost money in the second quarter: $3.1 million, or 16 cents a diluted share. That was slightly better than a loss of $3.3 million, or 18 cents a diluted share, in the same quarter a year ago.

But revenue more than quadrupled to $1.9 million from $436 million a year ago, thanks mostly to contract revenue coming from a collaboration launched in December with Pfizer Regenerative Medicine to develop and commercialize a stem cell treatment for inflammatory bowel disease patients.

In addition to trying its stem cell therapy MultiStem for heart attack patients, Athersys also is trying it to ward off graft-versus-host disease for leukemia patients who receive bone marrow transplants. The Cleveland, Ohio, company is designing a Phase 1 trial of MultiStem for patients who have strokes caused by weak blood flow.

Athersys also uses proprietary technology to discover drugs. It has been on the path of an obesity drug that Chairman and CEO Gil Van Bokkelen told securities analysts Monday has the potential to be first-in-class.

And a week ago, his company reported encouraging results from a small Phase 1 trial to determine the safety and maximum dose of MultiStem for heart attack patients. MultiStem is an off-the-shelf stem cell treatment derived from the bone marrow of adults.

Three escalating doses of the therapy (20 million, 50 million and 100 million cells) were well tolerated by patients. And patients with more severe heart attacks demonstrated better than 25 percent improvement in heart function (measured as ventricular ejection fraction) when given medium and high doses of MultiStem.

That high level of improvement is rarely seen short of radical surgery.

“An absolute improvement of 10 percent in left ventricular ejection fraction in patients who are having a myocardial infarction is a very significant benefit,” said Dr. Marc Penn, co-principal investigator on the trial and director of Cardiovascular Cell Therapy at the Cleveland Clinic, as well as the Clinic’s Skirball Laboratory for Cardiovascular Cellular Therapeutics, during last week’s conference call.

“It’s a greater benefit than any medication short of opening the artery that we currently use,” cardiologist Penn said a week ago.

Last week, analysts called the results “good” and “surprising.” One even called it a potential “paradigm shift in the treatment of heart attacks.”

“Yes, we think so,” Van Bokkelen said, at the time.

Yet Athersys shares have remained stubbornly around the $3 level, despite last week’s paradigm-shifting study results. During today’s conference call, one Athersys shareholder from the Chicago area asked Van Bokkelen why.

“In terms of the somewhat muted response in the market, it’s difficult to pinpoint why that happens,” Van Bokkelen said. “Analysts have responded positively to the progress we’ve made. We work with a communications team to get the word out.”

But stem cell and regenerative medicines are new areas for many investors. And the Athersys heart attack study was very small. “We’re doing the right things,” he said. “We hope that will translate into a better stock price, over time.”

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